21/05/2026
Starling Bank have recently launched their new Starling Accounting tool, which can be signed up within the banking app.
This has caused a few ruffled feathers with accountants, who have active partnerships with Starling.
To be honest, it is easy to understand why banks would go down this road, to an extent. The data is already in there. It can be utilised.
But the marketing of the tool direct to users is WAAAYYYYY off 😤
"Make bookkeeping a breeze. Corporation tax made simple. Submit tax returns directly from your account."
Simply allocating transactions to categories sounds easy. In fact, it is. The problem is, allocating isn't the end. Have you considered:
❓ Is this the correct category?
❓ Will any future Ai in the app be reliable?
❓ Have you attached a receipt?
❓ Is the receipt a proper receipt for HMRC purposes?
❓ If you're a limited company, do you know about salary/dividends/director loans and their tax impact?
❓ Have you treated VAT properly? Is is all 20% VAT, or zero rated, or exempt, or split rate, or reverse charge VAT?
❓ Does the item appear in your Profit & Loss, or Balance Sheet?
Accounting still requires professional judgement, knowledge of tax law and someone who knows what questions need to be asked.
The app will just do what you tell it to do. Some small businesses will jump on this but without understanding the risk of getting it wrong.
Businesses can categorise transactionsand submit returns to HMRC without their accountant ever seeing it!
The consequences of getting this wrong do not show up straight away. They will only show up down the line when there is an HMRC inspection and then there are penalties and interest to content with. For example, 100% penalties PLUS interest on underpaid tax if you're careless.........
Starling's Q&A on this says that accountants currently cannot access this product at all but they are "working on it" 😕
Important things to note - from Starling's own Q&A page:
1. You cannot use Starling Accounting if you use 'accrual accounting' and you are a sole trader
2. You cannot use Starling Accounting if you use the traditional basis for VAT and you are a sole trader
3. You can’t use Starling Accounting if your business is registered in Northern Ireland, and you trade goods with EU businesses.
4. The financial reports you can get from the tool aren’t final, and don’t count as statutory accounts that you can submit to HMRC.
We actually love Starling Bank. Their personal and business banking apps are great, and the ease of usage of Spaces helps people budget better.
Time will tell if users of Starling Accounting face future HMRC dilemas by doing their books in this way and submitting to HMRC without an accountant being able to give it a once over.
